Insurers welcome civil litigation reforms
The Coalition Government’s plans to simplify litigation have been warmly welcomed by the Lloyd’s market.
Following to the rise of ‘no win no fee’ firms, a substantial proportion of claims are due to legal costs, but the Coalition is now proposing reform of both legal aid and civil litigation.
The increased costs over the last decade have forced a similar rise in the cost of handling claims, and meant that some claims, even those of doubtful validity, cannot be contested for reasons of economic viability.
Legal costs now account for 40% of a claim, on average, and in small cases can dwarf the total value of the claim itself.
Kees van der Klugt, Head of Legal and Compliance at the Lloyd’s Market Association (LMA), highlighted the particularly high premium increase that motor and personal lines have seen largely due to ‘no win no fee’ firms.
Mike Noonan, Head of Strategic Claims Management at insurer QBE, has forecast that motor and liability insurers will benefit from more predictable and limited litigation costs, with the proposed changes also likely to cut the time it takes for a claim to be processed.
Category: Insurance News
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